Prosper.com announced last week that they finally got through their SEC registration and are back open for business. If you're not familiar with Prosper, it's one of the first online person to person lending sites...basically an eBay for unsecured personal loans up to $25,000. I've been a lender there since 2006 with mixed results and haven't bid in a while.
About 9 months ago the SEC shut Prosper down for selling unregistered investments. For some reason, Prosper thought the SEC rules didn't apply to them. They were wrong. Hopefully they used the 9 months down time wisely to improve their fraud detection and collection processes...things lenders have complained about.
The sad part is that Prosper had to shut down during the height of the credit crunch when lots of credit worthy small businesses and other folks were having difficulty finding lenders. It was a perfect opportunity for peer to peer lending to shine and Prosper missed it.
Prosper still has several legal hurdles to clear. Residents of many states aren't eligible yet to lend on the site which makes it more difficult to fund loans. I'm in one of those states but I won't bid until the delinquency numbers improve.
For anyone with decent credit history needing a loan, Prosper is worth a look. Here are some tips to get your loan funded on Prosper.com. Just make sure to pay it back on time.
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